SambaSafety recently hosted an insightful webinar exploring the state of auto risk in 2024 and how it's affecting fleets and auto insurers. The team of industry experts featured SambaSafety Chief Product Officer Rich Lacey, SambaSafety Special Advisor John Barbagallo and Hub International Senior Vice President of Risk Services Scott Fauts. Below is a quick recap of the key takeaways from the session, as well as a link to the free recording to watch on your own time!
>> Watch Now | "The State of Driver Risk in 2024: Critical Discoveries for Fleets and Insurers"
5 Key Takeaways from the Webinar
Our experts kicked off the webinar by highlighting the importance of the recently published 2024 Driver Risk Report: Key Trends Shaping Automotive Mobility. "It's packed with great insights from both SambaSafety and the industry that I think really illuminate the trends and strategies for mitigating risk these days," Rich said. He encouraged attendees to download the report, emphasizing its comprehensive coverage of critical data and industry trends surrounding insurance cost pressures, regulatory compliance developments and hiring and retention challenges.
Current Industry Dynamics and Challenges
John emphasized the multifaceted challenges currently facing the automotive mobility industry, particularly the rising costs associated with embedded vehicle technology and funded litigation. "I've been dealing with this subject for 40 years from an insurance perspective, and I have to say, this is one of the most challenging times I can remember in what is generally a somewhat cyclical business," he noted. "There are a lot of external forces impacting the issue of driver risk right now."
Despite advancements in vehicle safety, fatalities due to driving incidents continue to rise. Rich shared some startling statistics: "The dynamics of driving risk are not static. However, year after year, a few trends tend to emerge. Transportation incidents remain the leading cause of workplace deaths today, which is startling to many, including myself. Driving-related fatalities are responsible for 22% of all workplace fatalities."
Speeding and distracted driving are the primary culprits. Over 3,000 people lost their lives to distracted driving in 2022, and 31% of employees have admitted that their distracted driving caused a work-related crash – an increase of 5% from the previous year. Implementing targeted interventions to address these behaviors is critical.
Geographic Trends in Auto Risk
Scott provided a regional perspective on driver risk, highlighting significant differences in violation rates across various regions. For instance, North Dakota saw an 8.8% increase in violation rates in 2021, whereas New York experienced a 3.3% decrease. Factors such as enforcement rates, economic activity and road maintenance play significant roles in these disparities. Understanding these geographic trends is crucial for tailoring risk management strategies.
The Impact of Rising Insurance Costs
A significant issue discussed was the dramatic rise in insurance costs. Increased claim frequency and severity, coupled with higher repair costs, are driving insurance premiums to unprecedented levels. "Since December 2021, we've seen a 45% increase in insurance costs," John highlighted. "This is an issue we need to address as an industry. Our objectives should be aligned: we want safer roads, safer employees and controlled operating costs." Mitigating these costs requires proactive management strategies focused on reducing crash frequency and severity.
Labor and Retention Challenges
The transportation industry faces a persistent shortage of qualified drivers. More than three in five professional drivers today are over the age of 45, and 65% of human resources (HR) professionals reported that a labor shortage is one of the top three challenges in 2023. Rich emphasized that investing in employee development and training is key to improving retention rates and reducing turnover. "Organizations that invest in employee development and training are seeing a 57% improvement in driver retention," he noted.
From Reactive to Proactive Driver Risk Management
Access to better driver data is transforming how organizations handle auto risk. "We now have the opportunity to, instead of being reactive, be proactive," John said. Leveraging data to predict and address potential issues before they arise can substantially reduce violations and risk scores.
SambaSafety's efficacy study demonstrates that proactive driver monitoring and training can significantly reduce risk, with a 77% reduction in violations within 12 months.
Collaboration between fleets and insurers is also essential for creating effective risk management strategies. By utilizing comprehensive risk data, both parties can work together to implement tailored safety programs that improve underwriting outcomes and enhance overall safety. "It's really about enabling people to do more with less," Rich said, emphasizing the importance of efficiency in managing driver risk.
Access the On-Demand Webinar
Watch the full recording of the webinar below to learn more about the important roles of proactive strategies and collaboration in combatting risk and profitability challenges. 